It is commonly believed that four particular provinces are donors for the rest of Kazakhstan.  Committee on State Expenditure shared some information that confronts that belief.

Money Hub?

It does not take to be a hacker to see the picture of the Treasury’s incoming and outgoing streams.  All you have to do is take the Article #5 of the Law Concerning Republic’s Budget.

According to that provision, our central treasure collects most moneys from the following provinces:

Atyrau Province – KZT 221 billion

Almaty – KZT 211.5 billion

Mangistau Province – KZT 19.5 billion

Astana – KZT 38.5 billion

If to group above regions by the maximum input, then it will appear that Almaty and Atyrau Provinces, taken together give more than KZT 400 billion, while Astana and Mangistau -–KZT 60 billion.

Given the above, one might have an impression that other provinces suffer from lack of enough employment opportunities and their pockets are empty.  That is not true.

Spending All Money…

By Law Concerning Republic’s Budget, moneys from greater cities must be injected into provinces.  Such subsidies total some KZT 2 trillion 125 billion.    Obvious is the fact, that as long as there are donors, there should be recipients, out of which some receive more, others — less.

Biggest donations go to Turkestan Province – some KZT 402 billion.  Zhambyl Province receives KZT 194 billion.  West Kazakhstan receives KZT 76 billion, while Pavlodar Province – 52 billion.

Why so?  If to talk figuratively, provinces are like humans.  Some of them work hard, others – get support from those working hard. 

Our domestic economic professionals assure us that things are not that absolute.  In reality, all moneys coming to central treasure, are then evenly distributed among all provinces.  The purpose of that is to give all provinces more or less equal conditions. Distribution process depends on the headcount of a province.  The more people, the more money.  Another nonetheless important principle is the amount of money directed by province to the central treasury.  In general, that depends on the level of salaries paid to locals.  Between the first and the second, the difference can be quite material.

Let us review a situation of one year ago.  Last year, Pavlodar Province gave the country KZT 591 billion of taxes.  Provinces in the south gave KZT 478 billion.  In the south, we have some 2 million citizens domiciled.  In simple terms, people in Pavlodar Province are 3.5 times more work-productive than people in the Dixies.  But amazing is that when people from Turkistan relocate to Almaty, they are as combat capable there, as are locals.  Is it because they know how to conceal their profits, or because there really is not enough work for all of them in the South …

Cut and Contrive

It would be a mistake to believe that those provinces that make less money do not send moneys to other regions.  North Kazakhstan and Zhambyl Provinces make less than the rest, but they do pay taxes – within the limits of their capabilities, though.  In fact, official science deems them as the poorest ones in the country.  The National Statistics Bureau supports that belief. 

Local budgets also confirm that belief – Almaty budget is KZT 1,040 billion, while that of the North Kazakhstan hardly reaches KZT 385 billion.

But if we compare taxes paid by provinces and budgets given to them, we could make a rather curious conclusion – there is only one province in Kazakhstan that receives almost nothing from the central treasury.  That is Kostanay Province. 

Seven provinces of Kazakhstan are the foundation of the national revenue.  Out of them, the richest are Aktobe, Pavlodar and West Kazakhstan.  Six provinces are accustomed to ride on the backs of the others.  The poorest of provinces are Akmola, Kyzylorda and Turkistan Provinces, as well as the city of Shymkent.  That encourages that brainstorming. The richest of all provinces always had developed industries.  Kyzylorda Province, for example, has petroleum and agribusiness in a fairly good condition.  Some provinces are not very clear – they either transfer the majority of their profits to central treasury or receive support from others. 

Change Order

So why is it so, that some provinces are rich, whilst others are poor.  Kazakh economic experts share one common opinion that the wealth of a province rests on producing-extracting and processing industries.   Industry is where the money is, and where the highest profits are.

Not so wealthy provinces are the ones known as agricultural.  We all know that development of agriculture in this country is weak and stagnating.  There are some exceptions, though.  The Kostanay Province, for example, is both agrarian and industrial.  It is famous for its milk products for reasonable prices.  Almaty is another exception.  They don’t drill wells and produce oil there, but there is industry in the city, as well as trade and services.  Each province must identify their advantages and thus start improvement of their realities.